Which of the Following Portfolios Is Clearly Preferred to the Others

question 50

Multiple Choice

Which of the following portfolios is clearly preferred to the others? Expected Standard
Return Deviation
A 14% 12%
B 22% 20%
C 18% 16%

• A) Investment A
• B) Investment B
• C) Investment C
• D) Cannot be determined

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Definitions:

Psychological Dependence

A condition characterized by the belief that one cannot function or feel well without the use of a substance.

Physiological Dependence

A condition wherein the body adapts to the presence of a drug, leading to withdrawal symptoms when the substance is reduced or not ingested.

Tolerance

The process by which the body becomes less responsive to a substance or stimulus after repeated exposure.

Withdrawal

The process of reducing or eliminating the use of a substance after prolonged or heavy use, often leading to uncomfortable physical and psychological effects.